Polygon Explained: How Polygon is Leading Scaling Solutions for Ethereum

Rahul Ravindran

Previously known as Matic Network, Polygon is a framework for building interconnected blockchain networks. It seeks to address some of Ethereum’s major limitations—including its throughput, poor user experience (high speed and delayed transactions), and lack of community governance—using a novel sidechain solution.

If you want a quick overview of how polygon works, please check our video here:

Rather than being a simple scaling solution like its predecessor Matic Network—which uses a technology known as Plasma to process transactions off-chain before finalizing them on the Ethereum main chain—Polygon is designed to be an entire platform designed for launching interoperable blockchains.

Through Polygon, developers can launch preset blockchain networks with attributes tailored to their needs. These can be further customized with a growing range of modules, which allow developers to create sovereign blockchains with more specific functionality.

How Polygon Works

Polygon has been designed to work more than just an Ethereum scaling solution. It operates as the glue linking blockchains that revolve around Ethereum. When it goes live, Ethereum 2.0 will be an internet of independent blockchains known as shards. Every shard has unique data, qualities, and characteristics. It means that a shard is its blockchain but it is always supported by the Ethereum network.

The Ethereum 2.0 vision is quite a long way off since the ETH developers are still testing various features. During its past life as the Matic Network, Polygon discovered the opportunity to fill the gap that exists between Ethereum 1.0 and 2.0.

To provide the world with tomorrow’s Ethereum today, Polygon created two major components; Polygon Protocol and Polygon Framework.

Technical Architecture

The underlying philosophy is that Ethereum scaling is perceived to be a spectrum that results in an open-minded approach. This approach is seen to go beyond the small definition of Layer 2. Polygon was developed to support various secured chains, like L2, and stand-alone chains.

That is an umbrella term for sovereign sidechains and app chains. The latter promises a high level of data integrity and network privacy by using a ‘security-on-Ethereum-as-service’ setup. On the other hand, the former offers a high degree of operational flexibility and sovereignty to its ‘child chains,’ but somehow downplays the necessity of security.

Here are the components that make up Polygon’s digital network:

  • Security Layer – it provides digital protection to all Polygon-compatible platforms through the ‘validator-as-a-service’ protocol. Notably, it enables the projects to gain smooth access to Ethereum’s validator pool.
  • Execution Layer – it can be considered to be the run-time environment where all the blockchains that are participating can be deployed. For instance, the Ethereum Virtual Machine (EVM) is implemented and used within the layer for the execution of different smart contracts.
  • Ethereum Layer – this layer helps in facilitating many internal operations like dispute resolution, checkpointing, finality, staking, and messaging that exists between all of the participating Polygon chains and Ethereum.
  • Polygon Network Layer – this is described as the substrate where all of the Ethereum-compatible blockchains are deployed. It is important since it supports the smooth functioning of all the major operational processes that are happening within the network.

Consensus Mechanism

Polygon uses a Proof-of-Stake (PoS) consensus mechanism for its Plasma/POS commit chains. In order to participate in the consensus process on the Matic Network, users are required to stake MATIC tokens as an indication of that user’s commitment to the process. Matic’s commit chains also feature slashing (removal of staked funds) to dissuade stakers from submitting invalid blocks, illegally verifying blocks, or executing invalid transactions. Requiring validators to put funds at risk before they can participate in consensus helps maintain the integrity of the network.

Matic’s existing PoS chain consists of two layers:

  • The Bor (Block Producer Layer): Responsible for aggregating transactions into blocks
  • Heimdall layer (Validator Layer): Supports all validator nodes (stakers) that work alongside Matic’s Staking contracts on Ethereum to manage validator accounts, enforce slashing, and issue rewards. Heimdall has been implemented by building on top of the Tendermint consensus engine with changes to the signature scheme and various data structures. It is responsible for block validation, block producer committee selection, and checkpointing a representation of the sidechain blocks to Ethereum in our architecture. Heimdall handles the aggregation of blocks produced by Bor into a Merkle tree and publishes the Merkle root to the root chain periodically.

Key Benefits

Although Polygon’s advanced solutions like the Protocol and SDK are miles away from completion, the team has already shipped many Ethereum scaling solutions. Currently, users can enjoy fast Ethereum services using the Matic Layer-2 Chain, which is an Ethereum sidechain entirely secured by a network of staker-validators.

Major DeFi platforms like Curve Finance and AAVE have now ported their protocols over the thriving Matic Sidechain. This move has enabled the end-users to enjoy using decentralized finance without incurring the high ETH fees paid in gas.

Notably, the benefits that come with using Polygon/Matic sidechains for users and developers are massive. These advantages include:

  • It is faster and nearly free to use Ethereum-based NFT, DeFi, and gaming apps.
  • It is now cheap to build Ethereum decentralized apps and blockchains on Polygon/Matic.
  • Minting nonfungible tokens is faster and it involves near-zero gas fees. It operates within a huge Polygon-based NFT ecosystem.
  • Farming on DeFi platforms has now become financially feasible for the smaller farmers with the introduction of Polygon.

All of these benefits that come with Polygon technology are powered by two already-live pieces of the Polygon stack.

Layer 2 Scaling Reimagined

Fortunately, Polygon has fostered a layer-2 network for building interoperable, Ethereum-viable blockchain networks.

Layer-2 scaling solutions allude to off-chain solutions. This includes lessening or eliminating components with evaluation power from the prime blockchain prior to their execution somewhere else, for example, on sidechains. This builds throughput on the mainchain and spreads the evaluating proficiency across the network. Layer-2 solutions are receiving expanded fame as they play an essential role for the mass reception of cryptographic money.

The modular system of Polygon for assembling custom networks permits developers to send preset blockchain networks with just one snap. Besides, Polygon makes it simple for any blockchain to cooperate with another blockchain without any issues.

You can think about the MATIC sidechain as a valuable section of the vast universe of Ethereum, which offers clients prevalent project implementation and good working experience. Each Ethereum-based decentralized app or some other Ethereum-viable blockchain can be converted to the Matic Sidechain to work in a considerably more improved climate.


The Polygon token known as MATIC is the base resource of the Polygon system. In addition to the fact that it is utilized for exchange payments, it is used for storing tokens to protect the Polygon network, too. Since its rebrand, the Polygon MATIC token has received an incredible cost surge following a tremendous expansion in use.

The MATIC token has a covered stockpile of 10 billion tokens, with a current circling supply of around 5 billion. MATIC token is accessible on most well-known decentralized as well as centralized-based tradings, including some of the famous names like Binance, 1inch Exchange, and Coinbase Pro in the list. The crypto world is coming together to simplify the purchase of Polygon (MATIC) tokens by making it accessible with both fiat and crypto. CoinGecko has reported that at the time of composing, the Polygon MATIC market has an absolute market capitalization worth 1.8 billion dollars. Currently, the polygon MATIC token value is standing at approximately 0.36 dollars.

Polygon Transaction Fees

Although the transaction fees are just a fraction of what it is on Ethereum, it may be important to understand what happens under the hood. When a transaction is submitted each block producer at BOR layer (the block producer layer) is given a certain percentage of the transaction fees collected in each block. Selection of producers for any given span is also dependent on individual’s ratio in the overall stake. The remaining of the transaction fees flows through the same funnel as does incentives which gets shared among all validators working at Heimdall layer. What exact percentage of transaction fees will be shared with every block producer will be decided at a later point in time taking into consideration the overall statistics of live network. Until then, the bundle flows through the same funnel disbursing everything collected among all validators.

Validator has an option to charge commission percentage from its pool’s reward earning. The remaining will be shared among all stakers proportional to their stake in that pool. Following can be considered while deciding its commission percentage.

  1. As they are also responsible for committing the checkpoint transaction on the main-chain, a certain portion from the reward could be factored into the cut percentage. Though, this would vary from one validator to another depending on their approach to take care of checkpoint transactions.
  2. A certain percentage might be charged from delegations in exchange for one’s node running service.

Dapp Development in Polygon

As Polygon supports the Ethereum Virtual Machine (EVM), existing applications can be ported to it with relative ease. This can give users a comparable experience to Ethereum but with a much faster throughput and low fees.

If you’re an Ethereum Developer, you’re already a Polygon developer. All the tools you’re familiar with are supported on Polygon out of the box: Truffle, Remix, Web3js. Switch over to Polygon’s RPC and get started!

To get started with Dapp development checkout our dedicated free Polygon video course:

Polygon’s Test Network which is called Mumbai connects with Ethereum’s Goërli Testnet. All the network related details can be found in network docs

Popular Dapps in Polygon

1. QuickSwap

QuickSwap is an automated market maker (AMM) deployed on the Polygon blockchain. Under the hood, QuickSwap is a fork of Uniswap, the most popular AMM on Ethereum. On QuickSwap, users can easily swap between different tokens on the Polygon network, or earn some income by providing liquidity.

Like many other DeFi projects on the market today, QuickSwap features its own governance token – QUICK. The token allows holders to make proposals about changes to the protocol or vote on proposals submitted by others. QUICK tokens are periodically distributed to liquidity providers through a liquidity mining program.

According to DappRadar, QuickSwap currently has a total value locked (TVL) of around $870 million. The platform’s TVL peaked at $1.5 billion on June 16.

2. SushiSwap

Unlike QuickSwap, which was initially created for the Polygon blockchain, SushiSwap originally established itself on Ethereum before deploying versions of their protocol on Binance Smart Chain and Polygon.

SushiSwap launched in August 2020 in the midst of the “DeFi summer”, and is also an AMM forked from Uniswap. The project’s big invention at the time was the SUSHI governance token, which was distributed as an incentive for liquidity providers (this was before Uniswap’s UNI token existed). As a result, many liquidity providers switched over to SushiSwap, leading the community to refer to SushiSwap’s strategy as a “vampire attack”. Even though Uniswap struck back in September by launching UNI, SushiSwap’s strategy paid off, as it’s still a very popular platform among DeFi users. The project has since released new tools such as the lending platform Kashi and the BentoBox token vault.

3. 0x

The 0x API was launched on Polygon on May 31. It helps developers by aggregating liquidity from sources like QuickSwap, SushiSwap and Curve. The 0x protocol is capable of splitting up transactions between different decentralized exchanges in order to give users the best deal possible by minimizing slippage.

The 0x team also recently entered a partnership with Polygon. $7 million worth of MATIC was allocated to the 0x Community DAO, and 0x Labs contributed $3.5 million worth of ZRX. The funds are meant to accelerate the adoption of 0x on the Polygon blockchain platform. 0x saw over 35,000 users on Polygon over the last 7 days, and handled around 65,000 transactions.


To conclude, polygon brings faster and cheaper transactions which greatly improve the user experience of interacting with decentralised applications without having to do much work or learn new skills. If you are a developer, you should definitely try what polygon has to offer.


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